Ms Macbeth Posted January 29, 2011 Share Posted January 29, 2011 As things stand now. Will the rules still be the same by the time you retire, though? (Or by the time harvey19 retires, since he asked.) Forty years ago, the sensible option was to have a good pension scheme and be well prepared for retirement, so that you would have an income. Anyone who was sensible forty years ago has, in hindsight, made the wrong decision. Anyone planning now, for a retirement in forty years' time, should however bear in mind that the existing policies simply cannot continue for long, as they'd bankrupt the country if they did and would then be stopped anyway, by force. I am retired. I had my children about 40 years ago, had a few years at home, then worked sporadically for a few years, then part time for a few more - during which time I paid a reduced NI contribution, so I don't get even a basic state pension. Once I was in secure full-time employment I joined a pension scheme and increased my NI contributions. 15 years later I was redundant. So my pension is quite small. In fact, its just enough to stop me qualifying for pension credit. There are lots of people in a similar situation, who believed they were helping themselves to a better retirement, when in reality, if they'd never saved a penny towards a pension, wouldn't be much worse off now. People whose sensible decision paid off and who did manage to make 40 years contributions to a decent occupational pension will be well enough off in retirement not to worry about the level of their state pensions. I encouraged my adult children to join occupational pension schemes in the hope that their employment is long enough and steady enough for them to benefit by it. Already my son's scheme has stopped final salary pensions (private sector) but so far my daughter's (public sector) is still based on final salary. But that could also change - nothing is guaranteed. And when they retire in 25+ years, it may be all they have! Link to comment Share on other sites More sharing options...
Cyclone Posted January 29, 2011 Author Share Posted January 29, 2011 If they are even able to retire in 25 years time and hasn't become 35... Link to comment Share on other sites More sharing options...
Ms Macbeth Posted January 29, 2011 Share Posted January 29, 2011 If they are even able to retire in 25 years time and hasn't become 35... Thats why I put 25+! No guarantees for future generations, especially as we younger pensioners are likely to go on for a long time. Link to comment Share on other sites More sharing options...
Kaimani Posted January 29, 2011 Share Posted January 29, 2011 Yeah, you're quite happy with a tax dodge when it helps you .. But jealous if it helps someone with more than you. Jealous much. not at all. the idea behind my thinking is 'need'. if companies need tax breaks for whatever reason and no matter their size i don't mind. i know that these people run companies that employ hundreds of thousands so i don't want them unnecessarily harassed. i'm just saying their personal fortunes sometimes don't need to be increased. and i'm advocating a change in thinking and being over a change in the law. i don't earn much but what i have i'm happy to pay more if it'll help those who need it. Link to comment Share on other sites More sharing options...
Cyclone Posted January 29, 2011 Author Share Posted January 29, 2011 Taxation can only partly be based on need though, otherwise you end up with a 100% tax rate above some defined income, as no one needs to earn that much. And then those people leave the country and take their income with them... The rules have to be consistent for everyone, they can't be varied because someone decides that when you've got 1million+ in the bank they don't need a tax break. Link to comment Share on other sites More sharing options...
splodgeyAl Posted January 29, 2011 Share Posted January 29, 2011 You heard me. It's tax avoidance. You don't pay tax on the interest you earn on your ISA or any tax on the pension investment. You're practically stealing from the mouths of babies, the sick and the elderly (although it's okay with them as they've got immoral pensions as well). At least that's the socialist line being spouted in another thread. So, who's going to stop saving for retirement and give it to the government instead, the socialists (or are they communists) say it's the right thing to do. Won't somebody think of the children? Seeing as the whole economic system is immoral and corrupt, it would be next to impossible not to be so yourself, as soon as you get involved. Link to comment Share on other sites More sharing options...
Kaimani Posted January 29, 2011 Share Posted January 29, 2011 Taxation can only partly be based on need though, otherwise you end up with a 100% tax rate above some defined income, as no one needs to earn that much. And then those people leave the country and take their income with them... The rules have to be consistent for everyone, they can't be varied because someone decides that when you've got 1million+ in the bank they don't need a tax break. that's why i'm advocating a change in thinking, across the board coz we all know unless the laws change globally people will move elsewhere. like the bill gates and buffet thing. the idea that you realize you have more than you need so you give back. Link to comment Share on other sites More sharing options...
anywebsite Posted January 29, 2011 Share Posted January 29, 2011 You pay income tax on the income you get when you start drawing your pension, the tax relief on pension contributions just means that you aren't charged income tax twice on the same money. Link to comment Share on other sites More sharing options...
vinyl Posted January 29, 2011 Share Posted January 29, 2011 You pay income tax on the income you get when you start drawing your pension, the tax relief on pension contributions just means that you aren't charged income tax twice on the same money. Not really, because you still have your tax free allowances which allows many people to take their pension income virtually tax free. In effect you get a load more years worth of tax allowances than you would if you didn't get a pension. Link to comment Share on other sites More sharing options...
Cyclone Posted January 29, 2011 Author Share Posted January 29, 2011 It is worth pointing out that in a "perfect" capitalist world the common man wouldn't save any money, it would have to be spent. But anyway, would this be a Reductio ad absurdum by any chance cyclone? Not exactly, I just wanted to highlight the hypocrisy of criticising the rich for tax avoidance whilst practising it yourself. Link to comment Share on other sites More sharing options...
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